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Half of medium to large businesses planning on hiring a management consultancy in next year

Adam Goddard EVP, Agencies & Growth ventures 27 August 2020

Coronavirus has wreaked havoc on businesses, and drastic changes may have to be made in order to level up on the crisis. But who will businesses go to for guidance on how to move forward?

We’ve all heard of ‘The Big Four’. We’ve all seen references to management consultancies in relation to mergers, acquisitions, investments and the restructuring of many famous global brands. But do we really know what they actually do, and more importantly, how they can help?

47% of SMEs aren’t familiar with what a management consultancy can do for their business vs just 12% of medium to large businesses

Management consultants are responsible for getting under the skin of businesses, offering efficiency strategies and solving issues that might previously have been a barrier to success. Ultimately, they can help companies reduce costs and make savings, which is something that many leaders will be looking into in the aftermath of the coronavirus crisis.

Our new data shows that half (50%) of medium to large businesses are planning to turn to a management consultancy for support within the next year, suggesting that many senior leadership teams value external business expertise. However, that figure reduces to a quarter (26%) among SMEs, who are much less likely to pursue this option.

Finance will play a big part in whether companies turn to management consultancies – a large company is more likely than an SME to have the available funds to work with one. However, another reason is a general understanding of the services they provide. For example, almost half (47%) of SMEs aren’t familiar with what a management consultancy can do for their business vs just 12% of medium to large businesses.

As it stands, if their business was struggling and it needed support, SMEs are far more likely to turn to personal savings (49%) than to a management consultancy (5%) – showing that significant work still needs to be done to get SMEs even considering it.

Having potentially used one before to get to the stage it’s at now, medium to large businesses have a much bigger understanding of management consultancies, but might still turn elsewhere for support first. If their business needed external help, they would most likely turn to the government first (42%), private funding next (41%) and personal savings third (29%), with management consultancies coming in at 20%.

It’s not surprising that bigger businesses are the most likely to work with one soon, as they tend to have bigger budgets are more likely to be able to afford to.

However, that’s not to say SMEs won’t – we’ve seen that a significant number (almost half) aren’t yet aware of the benefits of bringing in a management consultancy, so perhaps now is a prime opportunity for consultancies to reach out and inform smaller businesses and help them explore their options.

This is a crucial period of time where many businesses, large or small, will be seriously considering their next steps and who to turn to in order to survive and revive their business. Management consultancies can play a key part in supporting and guiding business leaders through this inevitable change, ultimately helping them stay afloat and even come out stronger than before.

The data in this article is taken from our UK business tracker. The tracker offers businesses the opportunity to access and understand the current opinions, attitudes and behaviours of UK business owners and decision makers towards COVID-19, together with plans for how they will adapt their businesses going forward to mitigate the impact of any future crises. Get in touch to ask your own questions or find out more.

Click here to find out about how Savanta supports management consultancies.